It takes more than one savings vehicle to build a retirement nest egg, and that’s why one financial expert says this financial product shouldn’t be discounted.

"When you talk about an annuity and the lifetime income potential of an annuity, that's confidence building for clients to know they are not going to outlive that monthly throw-off of income," Edward Jones CEO Penny Pennington recently told Yahoo Finance Live at its All Markets Summit.

Annuities are insurance contracts that offer a guaranteed income stream, usually for seniors, that is paid either in a lump sum or fixed monthly payments. Unlike other investment vehicles, annuities provide the assurance that investors won’t run out of money in their golden years.

Pennington noted that when individuals are planning for retirement, they must remember that they will live in retirement for decades and must account for health care and long term care costs, because "we want our health spans and our life spans to marry up rather than to diverge."

"There's so many different tools to accomplish the goals that our clients are looking for," she said, including annuities.

For years, annuities have garnered sharp criticism for their illiquid design and associated fees and withdrawal penalties. The appeal of an annuity is its tax efficiencies similar to a 401(k) or an IRA, but Pennington explained that it stands out with its lifetime income potential.

“[Annuities] afford us an opportunity to build that portion of our income stream in a really systematic and intentional way,” she said. "So yes there is a place for those kinds of annuities — even inside of a 401(k) or an IRA — thoughtfully managed, there is a place for those."

Stephanie is a reporter for Yahoo Money. Follow her on Twitter @SJAsymkos.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit